Mining Projects Group in Fraser Range acquisitions; brings nickel identities
Acquisitive Mining Projects Group (ASX:MPJ) has upped the ante in the prolific Fraser Range in Western Australia with project and tenement acquisitions and teaming with renowned Nickel prospectors Bill Amann and Adrian Black.
This will bring MPJ out of a trading halt this morning.
Recently, MPJ entered discussions with China's International Mining Inner Mongolia Geology & Minerals Group Co.(IMMG) on MPJ's Roe Hills Project in the Fraser Range - so there is big end of town backing for MPJ.
Now Bill Amann and Adrian Black, who will take up a key equity position in MPJ by providing geophysical and geological services in return for MPJ shares - are behind some of Australia's biggest West Australian Nickel discoveries including:
- Nova – Nickel Sulphide Deposit in 2012
- Spotted Quoll – Nickel Deposit in 2007
- Flying Fox – Nickel Deposit in 2003
In total, their company, Newexco will be issued with 29,166,667 MPJ shares at the same issue price as the proposed capital raising for the services.
So if anybody knows anything about discovering Nickel in Western Australia it is Amann and Black.
Back to the acquisitions today.
- MPJ will acquire 100% of the Balladonia Tenements comprising 246km² expanding MPJ’s existing Fraser Range East Project which borders Fortescue Metals Group (ASX:FMG) and Sirius Resource’s (ASX:SIR) tenements located south-east of the Nova-Bollinger Deposit.
- MPJ will increase the interest of MPJ’s existing Fraser Range East and West Projects to 100%.
- MPJ will acquire 100% of the Dingo Range Tenements comprising 326.8km² bordering Rox Resources' (ASX:RXL) Mt Fisher Project.
Capital raising
MPJ will look to bed down a capital raising of $390,000 to institutional and sophisticated investors, but on the strength of the backing of Bill Amann and Adrian Black aligning their success with stock the raising should be popular.
The capital raising is proposed at an issue price of $0.003 per ordinary MPJ share and 2 free attaching MPJO options for every 3 ordinary shares subscribed.
Conditions
The transaction is conditional upon the successful completion of a capital raising, due diligence and the engagement of Newexco Services Pty Ltd to conduct geophysical and geological services in return for MPJ shares.
The acquisitions, the issue of shares to Newexco and the capital raising are also subject to shareholder and all required regulatory approvals.
Managing director Joshua Wellisch said: “The proposed acquisitions are a significant expansion to our existing Nickel and gold portfolio of projects in Western Australia.
"The engagement of Newexco and its agreement to accept equity in return for services is extremely encouraging given their extensive involvement with several major Nickel discoveries in the region.
"We are also pleased by the indicative support received from new strategic institutional investors to the proposed capital raising and will seek to secure formal commitments to the capital raising in the coming weeks.
"In addition we are continuing the progression of discussions with ‘IMMG’ on the Roe Hills Project as previously announced and look forward to providing updates on all projects in due course.”
Fraser Range East Project and Balladonia Tenement
The proposed acquisition of the Balladonia Tenement actually adjoins MPJ’s existing Fraser Range East Project would expand MPJ’s total exploration area to 601.4km².
This project borders Fortescue Metals Group and Sirius Resource’s tenements located to the south-east of the Nova-Bollinger Nickel deposit.
Dingo Range Tenements
The Dingo Range Tenements include four mineral tenures comprise a total area of 326.8km². The tenements border the Rox Resource’s Mt Fisher Project and Cullen Resource’s (ASX:CUL) Mt Eureka Project on both the east and West sides.
Key Terms of Proposed Acquisitions
- The acquisition of Next Commodities for consideration satisfied through the issue of an aggregate of 100 million ordinary MPJ shares and 25 million MPJO options to the Next Commodities vendors (being the shareholders of Next Commodities).
- In addition, MPJ will grant the Next Commodities vendors a right to an aggregate 1.5% net smelter royalty from any production achieved from the Balladonia Tenement.
- The acquisition of Coal First for consideration satisfied through the issue of an aggregate of 100 million ordinary MPJ shares and 25 million MPJO options to the Coal First vendors (being the shareholders of Coal First). In addition, MPJ will grant the Coal First vendors a right to an aggregate 1.5% net smelter royalty from any production achieved from the Dingo Range Tenements.
- The acquisition of EpiEnergy’s remaining 30% interest in the Fraser Range Tenements in consideration of the grant of a 1.5% net smelter royalty from any production received from the Fraser Range Tenements.
In addition MPJ’s obligation to pay $200,000, being the deferred consideration due under the existing EpiEnergy Joint Venture Agreement, will be deferred until 15 July 2015.
With the exception of due diligence (which is to be completed within 30 days of the execution of the Terms Sheet) each of the conditions is to be satisfied within 60 days of the execution of the Terms Sheet.
Analysis
The acquisitions position Mining Projects Group (MPJ) as a significant new "player" in the Fraser Range, picking up prospective ground for Nickel discoveries. With the added benefit of gaining renowned Nickel prospectors Bill Amann and Adrian Black.
They have virtually written the "playbook" on making large Nickel discoveries in Western Australia including being instrumental in Sirius' Nova Nickel deposit in the Fraser Range.
So their accepting shares in MPJ aligns their interest with other investors and also demonstrates the upside they see in making a large Nickel discovery on MPJ's tenement ground.
Also in the mix that shouldn't be forgotten is China's International Mining Inner Mongolia Geology & Minerals Group Co (IMMG), a significant group in its own right. IMMG sees value in MPJ's existing Roe Hills project in the Fraser Range.
It also does not hurt that the world Nickel production could increasingly be under threat.
Now with MPJ trading at just at $0.004 and a slender market cap of circa $2.2 million it wouldn't take much to move this valuation. In fact, we expect the acquisitions and alignment with Bill Amann and Adrian Black to be share price accretive today.
But that is just the start. The ride could be something else.
This will bring MPJ out of a trading halt this morning.
Recently, MPJ entered discussions with China's International Mining Inner Mongolia Geology & Minerals Group Co.(IMMG) on MPJ's Roe Hills Project in the Fraser Range - so there is big end of town backing for MPJ.
Now Bill Amann and Adrian Black, who will take up a key equity position in MPJ by providing geophysical and geological services in return for MPJ shares - are behind some of Australia's biggest West Australian Nickel discoveries including:
- Nova – Nickel Sulphide Deposit in 2012
- Spotted Quoll – Nickel Deposit in 2007
- Flying Fox – Nickel Deposit in 2003
In total, their company, Newexco will be issued with 29,166,667 MPJ shares at the same issue price as the proposed capital raising for the services.
So if anybody knows anything about discovering Nickel in Western Australia it is Amann and Black.
Back to the acquisitions today.
- MPJ will acquire 100% of the Balladonia Tenements comprising 246km² expanding MPJ’s existing Fraser Range East Project which borders Fortescue Metals Group (ASX:FMG) and Sirius Resource’s (ASX:SIR) tenements located south-east of the Nova-Bollinger Deposit.
- MPJ will increase the interest of MPJ’s existing Fraser Range East and West Projects to 100%.
- MPJ will acquire 100% of the Dingo Range Tenements comprising 326.8km² bordering Rox Resources' (ASX:RXL) Mt Fisher Project.
Capital raising
MPJ will look to bed down a capital raising of $390,000 to institutional and sophisticated investors, but on the strength of the backing of Bill Amann and Adrian Black aligning their success with stock the raising should be popular.
The capital raising is proposed at an issue price of $0.003 per ordinary MPJ share and 2 free attaching MPJO options for every 3 ordinary shares subscribed.
Conditions
The transaction is conditional upon the successful completion of a capital raising, due diligence and the engagement of Newexco Services Pty Ltd to conduct geophysical and geological services in return for MPJ shares.
The acquisitions, the issue of shares to Newexco and the capital raising are also subject to shareholder and all required regulatory approvals.
Managing director Joshua Wellisch said: “The proposed acquisitions are a significant expansion to our existing Nickel and gold portfolio of projects in Western Australia.
"The engagement of Newexco and its agreement to accept equity in return for services is extremely encouraging given their extensive involvement with several major Nickel discoveries in the region.
"We are also pleased by the indicative support received from new strategic institutional investors to the proposed capital raising and will seek to secure formal commitments to the capital raising in the coming weeks.
"In addition we are continuing the progression of discussions with ‘IMMG’ on the Roe Hills Project as previously announced and look forward to providing updates on all projects in due course.”
Fraser Range East Project and Balladonia Tenement
The proposed acquisition of the Balladonia Tenement actually adjoins MPJ’s existing Fraser Range East Project would expand MPJ’s total exploration area to 601.4km².
This project borders Fortescue Metals Group and Sirius Resource’s tenements located to the south-east of the Nova-Bollinger Nickel deposit.
Dingo Range Tenements
The Dingo Range Tenements include four mineral tenures comprise a total area of 326.8km². The tenements border the Rox Resource’s Mt Fisher Project and Cullen Resource’s (ASX:CUL) Mt Eureka Project on both the east and West sides.
Key Terms of Proposed Acquisitions
- The acquisition of Next Commodities for consideration satisfied through the issue of an aggregate of 100 million ordinary MPJ shares and 25 million MPJO options to the Next Commodities vendors (being the shareholders of Next Commodities).
- In addition, MPJ will grant the Next Commodities vendors a right to an aggregate 1.5% net smelter royalty from any production achieved from the Balladonia Tenement.
- The acquisition of Coal First for consideration satisfied through the issue of an aggregate of 100 million ordinary MPJ shares and 25 million MPJO options to the Coal First vendors (being the shareholders of Coal First). In addition, MPJ will grant the Coal First vendors a right to an aggregate 1.5% net smelter royalty from any production achieved from the Dingo Range Tenements.
- The acquisition of EpiEnergy’s remaining 30% interest in the Fraser Range Tenements in consideration of the grant of a 1.5% net smelter royalty from any production received from the Fraser Range Tenements.
In addition MPJ’s obligation to pay $200,000, being the deferred consideration due under the existing EpiEnergy Joint Venture Agreement, will be deferred until 15 July 2015.
With the exception of due diligence (which is to be completed within 30 days of the execution of the Terms Sheet) each of the conditions is to be satisfied within 60 days of the execution of the Terms Sheet.
Analysis
The acquisitions position Mining Projects Group (MPJ) as a significant new "player" in the Fraser Range, picking up prospective ground for Nickel discoveries. With the added benefit of gaining renowned Nickel prospectors Bill Amann and Adrian Black.
They have virtually written the "playbook" on making large Nickel discoveries in Western Australia including being instrumental in Sirius' Nova Nickel deposit in the Fraser Range.
So their accepting shares in MPJ aligns their interest with other investors and also demonstrates the upside they see in making a large Nickel discovery on MPJ's tenement ground.
Also in the mix that shouldn't be forgotten is China's International Mining Inner Mongolia Geology & Minerals Group Co (IMMG), a significant group in its own right. IMMG sees value in MPJ's existing Roe Hills project in the Fraser Range.
It also does not hurt that the world Nickel production could increasingly be under threat.
Now with MPJ trading at just at $0.004 and a slender market cap of circa $2.2 million it wouldn't take much to move this valuation. In fact, we expect the acquisitions and alignment with Bill Amann and Adrian Black to be share price accretive today.
But that is just the start. The ride could be something else.
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